Amcor (AMC)

News of an earnings downgrade from
Amcor
’s key competitor in the Australian glass bottling space is a minor negative for the company but should not deeply trouble investors, says Credit Suisse.

Owens Illinois cited the stronger Australian dollar’s negative impact on wine exports and depressed domestic beer consumption as reasons for its $10 million to $20 million decline in earnings from its Australian and New Zealand bottling business, factors which will also press on Amcor’s earnings.

The news “highlights tough Australian manufacturing conditions, particularly those export-related industries", the broker writes. But Amcor’s consumer packaging business, which has defensive market growth traits, should provide a buffer, and CS believes the company can maintain its recent share price outperformance.

Deutsche Bank takes a similar view, maintaining its “buy" rating on the stock, saying it does not believe Amcor will be impacted to the same extent as its competitor.